A firm that specializes in short selling of stocks is raising questions about the viability of technology used by PET chemical recycling firm Loop Industries Inc.
Hindenburg Research LLC said in an Oct. 13 report that "our research indicates that Loop is smoke and mirrors with no viable technology" and it suggested that some of the high-profile partnerships the company has announced have not produced results.
Montreal-based Loop, however, called the Hindenburg report factually inaccurate and defended its depolymerization technology.
"The claims it makes are either unfounded, incorrect, or based on the first iteration of Loop's technology, known as Gen 1, which was in use between 2014 and 2017," Loop said. "In 2017, Loop reinvented its process and developed its Gen 2 technology, which is at the core of Loop's commercialization projects."
Loop said that Hindenburg holds a short position in Loop stock, and it said that it believes the research firm "has not engaged with Loop directly nor does Loop Industries believe Hindenburg Research has done the required due diligence for this report."
New York-based Hindenburg, however, said it spoke with former employees, competitors, company partners and others in the industry, as well as reviewing company documentation and litigation records.
It questioned the credentials of some of the company's scientists and said two people involved with its fundraising on the stock market had previously plead guilty to securities fraud.
Loop has made a series of announcements in recent years of partnerships with others industry, but Hindenburg said that executives with one of them, Thyssenkrupp Industrial Solutions AG, said their partnership with Loop is on "indefinite" hold.
As well, Hindenburg questioned progress with Loop's work with PET resin maker Indorama Ventures Public Co. Ltd., which has also been investing in recycling operations.
Hindenburg said it submitted its findings to regulators.